The Jet Airways stock rose in trade today amid a report that Delta Air may buy stake in the Naresh Goyal-owned carrier. The stock rose up to 12.59% or 27 points to intra day high of 240.90 on the BSE. The stock opened with a gain of 2.31% to 218.90 level compared to yesterday's close of 213.95. It closed 10.19% or 21.80 points higher at 235.75 level on BSE. It has gained after two days of consecutive fall.
The small cap stock has fallen 59.83% during the last one year and lost 72.52% since the beginning of this year.
Atlanta-based Delta Airlines may buy a stake in the cash-strapped Jet Airways, Financial Express reported, citing sources familiar with the matter.
The report further said Delta was keen to buy stakes held by chairman Naresh Goyal and Etihad Airways in the airline. It also plans to infuse capital into Jet, the report said.
Naresh Goyal holds 51% stake in Jet Airways. Delta is also looking to buy 24% stake in Jet held by Etihad Airlines. Etihad bought a minority stake in Jet Airways in 2012 for about $379 million.
The airline also denied defaulting on defaulting on lease rentals' payment which also lent support to its shares. The company is actively engaged with all its partners, including lessors and airport operators and regularly providing them updates on efforts undertaken by the company to improve its liquidity, it said in a regulatory filing.
The airline was served a notice by the Airport Authority of India and the aircraft lessors over the delay in payments, according to media reports. The beleaguered airline is scouring for funding as it is struggling to keep up its expenses amid a stiff competition in the aviation sector, hike in fuel prices and declining rupee. The airline's fleet comprises ATRs, Airbus, and Boeing jets. Out of its total fleet of 124 aircraft, as many as 108 are on lease.
The air carrier is facing severe cash crunch and recently handed out pink slips to 20 employees, including some senior-level executives, who were working in the airline's crucial in-flight services department. The employees received their job termination notices this month, the source said.
It can be noted that the airline reportedly had recently asked 15 managerial level employees from various departments including engineering, security and sales, to leave the company.
The full service carrier, which is partially owned by Abu Dhabi-based Etihad Airways, has delayed payment of salaries to its senior management, pilots and engineers due to its deteriorating financial health.
Significantly, a decade back, Jet Airways had announced sacking of 1,900 employees, including 800 unconfirmed and under-probation employees, across all operations. This led to an uproar and chairman Goyal was not only forced to take back all the sacked employees over night, but also had to apologise.
Jet Airways group posted a net loss of Rs 1,326 crore in the three months ended June, compared with a net profit of Rs 58 crore in the year-ago period. Along with the June quarter results, the airline's board, during its meeting on August 27, had also considered various cost-cutting measures, debt reduction and funding options.